UNIT 15: Early Global Commodities

VIDEO SEGMENT: Silver Connects the World: China

This segment explores China's contribution to the creation of a global silver market during the sixteenth century. By the fifteenth century, China had been producing prized commodities like silk, jade, tea, and porcelain for hundreds of years. The Chinese exchanged these items within a thriving system of domestic trade, long-distance land-based trade, and tributary trade with nearby states. Because of these well-established trade networks, there were few trade items the Chinese needed from other channels.

That changed in the mid-fifteenth century, when the Ming government's century-old system of using paper currency finally collapsed. At that point, the government adopted silver as its preferred medium of exchange, and promised from then on to pay all salaries — and to collect all taxes — in silver. The result was an explosion in demand for silver throughout China. Without adequate silver resources of its own to satisfy such demand, however, China had to look beyond its own borders.

Initially, the Chinese imported most of their silver from Japan, whose mines produced nearly a third of the world's silver output in the sixteenth and seventeenth centuries. However, by the 1540s it was already clear that the Chinese demand would outstrip the Japanese supply. It was at nearly that moment that silver from the Peruvian mine at Potosí was making its way onto the market — a historical convergence that would set the first global trading network in motion.